the street." diamond foods is spiking today, its largest day in three months. news behind this pop, two analysts covering the pop says don't count them out because diamond foods remains a favorite among the shorts. back to you. >> thanks for that. apple is purportedly testing wristwatches designed to have some functions of a smartphone. this morning, we're asking what can they possiblibly do to turn its fortunes around. it can monitor your weight, mood and body mass index. >> i think there are products like that. >> probably buy pebble and instead of selling them for $199, double the price and put apple's name on them. >> watches will sell if preloaded with lots of cat videos. people love cat videos. ain't that the truth. a big week for euro zone and

central bankers and maybe talking about trying to cool this currency war. >> absolutely. i don't have an issue with the 66 billion in tens, threes and 30s, because i think what's going on in europe in the last couple months will move the paper just fine. it's about europe. the end of july, the funding issues seem to have been taken care of. let's assume that's the case. the global economy, depicted on the chart simon had said it isn't timely and it will be around a long time and the market has to adjust to the lower growth globally. >> rick, glad you're there today. rick santelli. let's get back to halftime. carl, thanks very much.

let's see where we are. the dow is down a fraction at 16 points and s&p 500 and nad also touch and go at this hour. at the half, sellout, why air wick smith is dumping so much google stock and what it means to your money in high flying shares. just buy it? going toe-to-toe in the great debate. the greatest trade of the past 20 years. our next host says he knows what it is. he is with us for the hour. for a real money view of the markets, housing and so much more along with our traders. stephanie lake, josh brown, simon and for now, welcome back to halftime. >> nice to see you. >> even with the snow coming east. the greatest trade the past 20 years. people want to know what it is. why don't you tell them? >> i don't know it's the

greatest trade but a good trade based on all the things we're looking for. contrarian play, market barriers to entry and missed pricings. when we look at a trade we're trying to figure out what is the best missed pricing at the moment? usually that follows some governmental intervention. today, that these be foreclosed single housing. you look at the arena we're dealing, 120 million single family units that exist. unfortunately for the average americans, about 6 million of those 120 million are delinquent, default or foreclosed today. about 6 million have been foreclosed upon. the delivery of those foreclosed units, the shadow inventory in the banking sector really the toxic waste dump for banking for a long time how that gets resolved leaves a beneficiary

who can buy those assets below replacement costs, rehabilitate them, lease them, manage them and provide an alternative to the average americans for homeownership even though affordability is the all time lowest for subsidized interest rates. rental is an opportunity an option for those who had their credit in credit purgatory because of delinquency or purgatory, rental is an option. >> we're talking about buying up single family homes and renting them out as the or one of the greatest investment opportunities you've seen in the least 20 years. you've been capitalizing on that. m overall, does housing look as good to you as people say it is to us? >> that's a tough question. the fed has one major play in its playbook, print money by hitting a character on a typewrite

typewriter, wroos thuse that pr capital to buy mortgage backed securities originate them through gses now in conservativeship that have cost us $200 billion since 2006. in return, the gses go to originating banks and encourage them to originate single family mortgages at low interest rates that can then be bundled into mortgage backed securities and thus provide affordability to the homeowner, not the scarcity of housing but availability of credit. home building stocks have surged. there are great ones, and all the big national home builders benefitted from taxes and had big loss carrying those taxes forward. the current value of their unused inventory of lots. the manufacturing of a house is very simple. the creation of a lot is very complicated.

i think the market correctly interpreted return to confidence, you have a couple million units a year of new housing that's needed for new housing formation. forget the demographics. i have a 30-year-old at home. he's not leaving the house. the combination of what's happening in housing is something else. but for sure the lack of supply over the last five years has caused a demand where affordability because of s subsidized credit from the government is once again causing the hope of every american saying, not that i need a roof over my head, but perhaps housing is a proxy for the creation of wealthy that i'll never have in my job. >> a quick question. we were talking about the housing demand there. you obviously are an investor. houses have been going up. how much of that is attributed to investment demand versus real demand. is that really masking the housing recovery? >> i think the answer is yes and know.

on the rental side, the acquisition of single family houses, for sure, has been done by some great firms. blackstone, wayne hughes, public storage has great vehicles, three or four great institutions who are buying. housing has always been a debate between consumption and investment. our government said it's consumption. in the cpi, you have 43% of cpi based on the rental value of housing. i think investor phenomena has helped the economy because it's taken that shadow inventory out of the banks, along with regulatory capital rules. but, for sure, along with that comes a resurgence of confidence. phoenix, home prices have gone up 22% in 12 months. is that because we were all there buying? for sure. there were only 50,000 housing units a year that the banks were producing to be bought. that produces some pressure on the individual who, you know, i really want to buy a secondary

house. now, i don't have the ability to do it. >> we'll talk much more about the housing trade through the rest of the show, certainly. quickly, before we move on, how many homes are we talking about in the portfolio of this investment vehicle, if you will, that you have? are we talking thousands? tens of thousands? >> if you took the -- in our investment vehicle, we're at about 8,000 plus now, blackstone probably 10,000 plus, wayne hughesing at 8,000 plus. you took the five or six big institutions, maybe all of us together on the most aggressive day have 50,000 units. the size of the universe today is 6 million. what's available to be restructured, before you go back into non-performing loan, another issue and topic. banks have gotten out of the penalty box because of regulatory capital rules. you have 6 million units trying to work their way back through

the economy. the simple investment theory, if you can buy something below replacement costs and you think the market is coming back and appreciating, eventually when those lines cross, you will have capital appreciation. in the meantime, we're buying these houses at 14% gross return and 6% net return. we're buying them one at a time. it's jurassic park, the delivery vehicle for this is trustee sales and mls. it's not a global trade for the average individual. now it will be because these become reads. the difficulty is harvesting because of barrier to entry. why isn't everybody doing this? because it's a nightmare. want to get enfoe frinfo frf you to tom and those that don't see this as tom does. >> we like wirehaeuser well.

they have done a very good job in the new management structure. we also like home depot, your typical name. the other one we own is adt, home security. kind of dish the radar screen, 93% recurring revenue pretty impressive and 20% market share in that business. >> josh brown, as you listen in, where do you see the greatest opportunity in housing? >> the really big point is the average individual can't really put this trade on. warren buffet said he'd buy all of them if he wanted the infrastructure to do that, all of these homes. you can't really do that. what you can do is be involved in the home improvement companies. every foreclosure that comes back to the market as home rent rental needs work, 10 grand or 50 grand, someone has to put up sheetrock and new window treatment.

sherwin williams has been working and home depot was standout last year in their category and overall. i don't see anything that changes that trend. obviously the related companies have gotten more expensive. this is not a six month trend, a 5 or 10 year trend until we can get enough people that can come out and buy these homes rather than rent. >> the problem i have with all these names, everybody has said tom is a smart guy and they bought sherwin williams and i'm not in these anymore and i would be taking profits because they've gotten ahead. define a dip, 10%, 20%, these need a correction. >> you always need a contrarian's take. >> one insider is cashing out and cashing out big-time. cnbc's john fod has those details from san jose. john. >> google executive chairman erik smith is planning to sell a

big chunk in the company. does he know something we couldndon't. he's filed to sell 2 million over 12 months and still have 5% voting power afterwards. he's taken a less controlling role in the company since larry page took over two years ago. google stock is near an all-time high as they took significant risks with hardware and the nexus program. not only is schmidt's traditional role less in demand but his role as government liaison has gotten less intense. google settled with the sec to end the two year investigation into its search practices. and a little less involved in the company and pushing 58 years old and maybe it's time for him to diversifdiversify. he struck me as a bit more cautious as a leader on the technology side. i'm not convinced he would have done the motorola acquisition

and texas tablets and the jury is out on how it plays out and wonder if larry's maverick move could play into this move? >> you could take that as a question whether this really is a sell signal. if eric schmidt is losing somehow some faith in where this company is going? >> i don't know he's losing faith. when you're not in control of something it's a little bit nervewracking to have your whole net worth tied up in it. i would leave it at that. i don't think he spots something that makes him want to run the other way. that being said, google had a huge run. people don't realize we're caught up talking about am, google has done well. the stock reacted nicely to the news. the fact he's allowing himself the ability to take money off the table, i don't know if that's google specific or his own life specific. i wouldn't try to infer too

much. that's a tough game to play. >> >> when you see alleged smart money, eric schmidt selling out or a sizable position of a large position, do you get worried as shareholder, investor? >> i do because i know i'm always the most uninformed. the easy thing to do in trying to find your way through transparency, statistics, data, trends, is to follow the leader. in our corporate structure, it's become a little complicated. some of the great people, like eric, probably have a whole series of planned investment hurdles for their own sake. it's really much simpler to align yourselves with the interests of whoever's driving the locomotive and a simple way for somebody as uninformed as i am to follow. >> simon baker, what harm are you, if you see what eric schmidt did today, you ysay that's a sell signal for me to get out of the stock.

why not do it? the stocks had a great run. why not? >> morgan stanley came out with a research google is the next google. he's a high net worth guy. has a lot of shares. taking the money off the table. i heard a rumor he is investing in single family homes after what he heard here. when you have 90% of your net worth there, you take it off. >> what does it tell you this stock is not down 10% today. >> the stock is not down 10% today. if people were worried about it, people are saying, good job, eric, i wish i had that much money and moving on. the latest on the shareholder revolt on nike. can the run continue? the revolt on dell. with fidelity's new options platform, we've completely integrated every step of the process,

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welcome back to the "halftime report." dell's largest independent shareholder, southeastern asset management and other investors reportedly have objected to its deal to go private. one well-known investor that has been very vocal in his opposition, richard pizina, i spoke with him this morning and he is not happy and said the price doesn't reflect the long term earnings of this company, about a buck 70 and says it will

grow over time and values dell more like 25 bucks a share. he held 12.7 million shares. despite those headlines, not much of a reaction in dell's stock price today. scott, back to you. >> jpmorgan says just do it. upgrading nike stock a boost in the market. bk is the bear against the bull. make the case. >> just own it. nike has $2.3 billion in free cash flow. it announced an $8 billion purchase, a gate catalyst, a sell pricer on the stock the last year or two, a slowdown in china, it has that corrected. big opportunity for women's peril -- peril -- can you say that? >> apparel. that's how we say it here.

>> that's the problem with it. less than 5%. e-commerce 2-3%, mass consecutive growth there and hear they're coming out with nike bks. >> i like those. >> what's wrong with nike. >> everything simon talked about is already priced in the stock. jpmorgan today didn't bring out anything incrementally new, all about the fact the management said everything will be great. if you went with everything because management said it will be great the next six months or so and the second half of the year better for discretionary spending, that's a false assumption. >> one thing nike has done you can't put in a balance sheet is innovation. they continue and continue to put in innovation and nike is inconsistent. you have a core holding in that particular space, nike has to go long. >> we know about innovation and

the pipeline. is there nothing else to propel this and no other catalyst. something like 2.5 discretionary spending is what they do. if you look at discretionary spending, i think it's going lower. >> stephanie, who made the more compelling argument on nike? >> we own nike so i favor on the bull-side. curious why the upgrade was today. i agree there wasn't anything new in the note. there are two things to keep in mind for nike. china anniversary up 43% the end of 2011. up only 33% and if they fix that, as simon said, that will be interesting. the other is margins, one-time product cost that goes away. that should help and see what they do in terms of input costs and cost cuttings. if they can get the margins right, investors will bring the stock higher. >> anything to put in? >> all the 10-ks and qs is in

the stock. let's focus on price. it closes above 55 with a decent volume, look at a monthly charge. there's something major that could happen above that level. there are no sellers there. let me tell you fundamentally speaking. whatever you think they've already done in china is a joke compared to the opportunity. one is the counterfeit michael jordan brands and nike hasn't bothered to pursue their rights. they're about to launch in asia across every level. i don't think we want to quibble. something larger is happening with nike, global setup. i think simon nailed it. >> our good friend, carl icahn in the fight of the century, on this show last month and putting his money where his mouth is. raising the dividend and the holding company of icahn investments, up 68%.

like energy. any of you guys want to take on carl. proof activism works when you have permanent capital in place. cvr, 2 billion, netflix, a quit $800 million, raise your hand, we can call carl. nobody? >> the guy's a winner on these? this is this is investment game. he's actually made it work. probably the best way to do is buy his stock. the problem you have with carl if you follow him into a stock after he's announced he's been into it, he can dump it and you won't know it. you're much better off following him iep and following the others. >> he's kill it with cep annette flicks. >> activism as public as ever with what they're calling for apple to do. good for the markets or bad? >> i think it's terrific for the

markets. like being in 30 foot surf, would you rather be with a professional who knows where to be, how to get over the wave and how to take care of yourself if you can't or a bunch of amateurs. carl is one of the best. doesn't do things frivolously, understands what transparency and governance is. word structures tend to be toxikated by ceo iidis no matte what we say and having that in a 30 foot surf is important to calm the waters. what is the most important investment you can make now. jcpenney ron johnson reportedly spending less than a full workweek at the company's headquarters. is it another reason to sell the stock? our traders make that call next on halftime.

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today is gonna be an important day for us. you ready? we wanna be our brother's keeper. what's number two we wanna do? bring it up to 90 decatherms. how bout ya, joe? let's go ahead and bring it online. attention on site, attention on site. now starting unit nine. some of the world's cleanest gas turbines are now powering some of america's biggest cities. siemens. answers.

welcome back. time for our top three trades. valero is the energy company trading at the highest levels since 2008. a buck and half percent. >> if they got an upgrade today from the abundant of crude and high margins. love this sector and stock. i would lighten up on a third of it and take that dividend. just protect yourself. it's been a rocket ship. >> soy mon, what's happening? >> first revenue growth in eight quarters announced a share repurchase and guess what, up

graded by 4%. >> ron johnson rarely spends a full workweek at the company's headquarters and puts in shorter hours than previous ce o's, based on a previous newspaper report. the stock is up 2%. what do you make of that? >> no idea. i don't really care where ron johnson works or what he's doing on a day-to-day basis. my concern is can he get traffic going an they just announced a return to sales concept. i don't know what that means. traffic remained flat and they are doing a lot of things. >> you do care. if the stock is in the tank and the report is true -- >> i would have a hard deem believing the ceo of any company is spending four days week doing one day a week not being around. in this day and age, you can do a lot through virtual networks

and that kind of thing. the more important point is you have to get fundamentals right. he's far from getting them right right now and see how it progresses. >> it's to do with leadership at the end of the day, regardless what he's doing. jeff bezos would be working three days from his seattle home and showing up in the trenches. >> i think if he's there four days, that could be enough. >> barrack is not sitting on the beach with his cell phone, or are you? >> not smart enough to do that. >> and we heard tom is positive on the housing recovery at the top of the show. i think it's counselor down -- intuitive a little bit. some people say you must love the home builders and you don't. >> there's great home builders in the public specter who are really taking advantage of

recapitalizing their balance sheet, they've done the last few years and operating leverage. that's what it's all about. they've had that. home building goes the way of the government, right? the affordability of credit that enables it. to do that, they have to produce lots. producing lots means i have to get farmland and figure out how to get it titled, streets, utilities, roads, schools, fire departments. that takes capital that doesn't lend itself to a public balance sheet. five year out capital. the way home builders have done it is joint partnerships with capital providers and counties and cities an states and most of our counties and cities and states are broke and melrose that was available to finance the lots isn't available. two things can happen. quantitative easing, know what it is. i don't know what quantitative drawback is.

if the government decided the thing to do is slow down the affordability index, it does it with the tap of a button. the inventory of housing going forward once deferred taxes are used up is the coast of producing that lot which is going to be double of the cost of producing a lot on the balance sheets today. >> are you saying essentially the housing recovery is unsustainable if the fed takes away the punch bowl in any meaningful way? >> 1,000%. all we've done is converted private loss to public loss. the gmc too complicated for any of us to understand i guaranteeing 95% of mortgage in originated in the private banks in america. 95%. 2006, it was 35%. the government is subsidiz ssii our av raytious appetite for home appreciation. if that did not exist, the

market would correct itself, interest rates would go up, cost would go up and i believe homeownership would continue to go down. >> the government program won't stop this any time soon. >> they can't. if they keep printing money. they weighed in and said we will keep interest rates low and print money. how do they do it? buy mortgage back securities. how do they create them? get the banks to originate and cindy gait. the banks can't make those loans at 2.5%. the margin for banks is so minuscule today, forever they weren't able to sell those non-recourse to agent guarantors to package, it wouldn't exist. it's all artificially subsidized by the government, which is fine. >> housing stocks have had a great run as housing had a sniff of this come back. does it continue as long as the fed's in this game? do you take profits on some stocks? >> one -- i do think you do. >> he's giving you reason to be

cautious. >> absolutely. that's the reason to be cautious about the whole department, everything. if they start pulling back this free money, everything starts to correct itself. i guess my question for you, tom, eventually, let's just say we print money forever, run out of mortgage backed securities to buy, they have to create new ones and start to go down the credit chain and credit easing gets a little better. how does that affect your five year plan if somebody can get a home that couldn't afford it before can now buy a home. how do they afford rental market. >> a great question. you have yield and house appreciation. right now, we're playing the yield game without risk premium. it could go the other way. let's assume housing rip roars back because our yielding is wrong and afarability is better and people can afford to buy more houses. house prices appreciate we've been buying 50% replacement

cost, existing home inventory doubles or triples. with marginal 20 or 30% leverage. high teen low 20 irr. if it goes the other way, quantitative easing comes back and all of a sudden interest rates rise, what happens? people locked in existing interest rates are fine. you want to sell your house, you can't sell it because the interest rate has reversed itself for affordability. what happens to us as renters? we increase rent. what i love about this particular trade either way it works. god willing, economy rips, home builders do great, everything comes back, we're fine. it doesn't we have larger pool of inventory because you have 1% of delinquencies out of 20 million. interest rates go up, you will have another 10 million. think of the 6 million delinquent default foreclosed houses, houses on either side. somebody making a payment yet the house is being foreclosed

but their mortgage exciteds the value of the house. it's starting to come back slowly, which is this confidence. you look at underwater mortgages next to default and delinquent and foreclosed mortgages 30 million houses across america, that's a travesty. coming up on the half, a smart watch, why apple's next big thing may be a wearable gadget. details on that. and adam parker tells you why e he's betting on a pull back and how to out-perform the market if that happens after the break. [ coughs ] [ angry gibberish ]

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welcome back. speculation am will release its dividend depends soon and maybe a watch will send the shares higher. can the watch turn the company around? is this the key? >> i don't know it's the key. let's not scoff at it so easily. i don't think a watch is a game changer for half a trillion dollar company. look at other things they revolutionized, rather mundane. the computer, the telephone. a lot of speculating maybe a tv remote or whatever. the watch thing is interesting.

i have no idea how this will go but say they will probably not do this as an after thousandtho probably a big launch. >> have shares bottomed? between the einhorn call to deploy more cash, now you have trickling out of what they may come out next, is that enough to put a bottom in. i don't know. we own a little bit of stock, not trading. it's not that exciting anymore. i couldn't tell you if it revisits 400 or 500 first. i'm a lot more interested in other names out there. >> bulls home it hits 500 first because it's a heck of a lot closer to 5 than 4. would assume we've seen as bad as it gets unless the next quarterly report is even a bigger disappointment than the other one. it's too tough for someone in my position to say. i would reserve judgment. i will tell you if this wasn't a stock in the 400s, in the 40s,

we wouldn't be freaking out whether it sees 40 before 50. >> i hear you. do you have an iphone or blackberry? have both. i love the iphone although it's difficult to type with big hands but i would never bet against apple. if you go into the apple store on fifth avenue and you just watch the evolutionary progress of how you're treated as a customer, it's genius. >> do you have a probl problem -- they're sitting on $137 billion or so in cash. should they be doing more with it? >> i think as fast moving as technology is, they're doing all they can do and doing it appropriate and conservatively. i would never bet against apple. tomorrow, "halftime report" is going to be live at the tech conference in san francisco where apple ceo tim cook will be giving a keynote address. what will he say, if anything, about all that cash.

there talking tech at noon eastern. by the way, his presentation was moved up and has speculation rampant he may talk about something. dividend, new product? who knows. his appearance has moved the stock and been about product innovation and things of that ilk and also talked about cash in the past. see what he says in san francisco few. right now, stocks are in negative territory. if our next guest is right, it could be the beginning of a new downward trend. nice to see you. >> good afternoon. >> people are getting used to parker the nay-sayer on the markets. why do you think we're at the cusp of perhaps a pullback here? >> actually, i'm not making a short term call at all. we have frameworks for earnings and a multi-that you should pay for earnings and that's how you get the market level.

i think the market is ahead of the fundamentals, but when i talk to investors, i think they're not really word about tail risks right now, worried about upside risks, probably the market can continue to do okay, as long as the earnings from the companies don't materially disappoint. our framework that says market is ahead of itself, usually, when you have very low earnings growth and extreme interest rates, it's not good for markets. as we look out six, 12 months, we could see a correction. in the very near term, that's not what i do, too tough to call. >> the framework of your thesis has been for the last 12 month, a deterioration and significant one in earnings. that's why you thought we would get to 1167 last year and why you're a little more bearish and probably the street, obviously is, right? it's all centered around earnings. >> yes. when the street was at $114 for 2012 earnings, we were at 100. i think the number will come around 101, 102.

the earnings framework has been pretty good, scott. i think the difference is the multiples expanded, not contracted. what you talked about before the commercial is related, to the quantitative easing. obviously, when you look back at history, you don't know how to study when you create trillions of dollars to buy your own securities, look at growth and rates. if i told you a year ago you would have basically no earnings growth in the s&p for the second half of the year and the lowest nominal yield in the history of the united states of america, anything you said related to the multiple, expanding, you couldn't prove. it turned out to expand largely because of qe and european policymakers. sometimes historical data and m empirical evidence are instructive and sometimes they're not. we have to reach a judgment call. it is useful like it might have been in march of 2000, to say what does a framework about growth and rate say. and we probably have two or three-quarters where either the

unconventional policy makes the economy better, lower the unemployment rate, raise your gdp or outlook to major corporations. we don't see it imminent to be honest. we're in that key couple quarter period right now. >> stephanie was looking a little skeptical, adam, as you were making your case. >> i have a quick question for you. one of the big pieces to the story, we haven't seen business investment. when do you think that will start to happen? we did see a little bit in the fourth quarter. that could be the real upside to earnings as you go through 2013. >> it's insuranteresting. what's good for the economy and companies isn't always con gruous. our work shows we don't think there will be a big capital surge. i know management said that. but cap x sales aren't that big in the average. and 16 of the biggest 22 industries are below average and

doesn't look particularly lean. i don't think you need that big surge in capx. i think the reason you're not seeing it management doesn't have great ideas. if you had a strategy of buying stocks that had high cap x to sales and shorting those low cap x to sales you would have under-perform a huge chunk of the term. i actually don't think you need that surge in cap x and don't think you want to buy stocks about to spend it. there's lots of examples of that. >> you have to be impressed with the fact the market has been able to tune out the noise pretty well. people have been calling for a pullback of something larger than 2 to 3% many weeks now and it has not materialized. >> i set framework six to 12 months in advance and my job is to out-perform no matter what it is, whether buying high quality names or china exposure and dividend and growth, the funny thing is in 2011 we had an accurate market call and our portfolio barely out-performed

and in 2012 it substantially out-performed. it's about the stocks that will out-perform very telling and hard to call given all the unconventional policy. >> thanks. >> any time. take care. >> you, too. adam parker. coming up, the man who made vanguard a major player, ceo jack brennaman. and ahead, exclusive with citigroup, ed morse. ding i'm so into it, tdd#: 1-800-345-2550 hours can go by before i realize tdd#: 1-800-345-2550 that i haven't even looked away from my screen. tdd#: 1-800-345-2550 tdd#: 1-800-345-2550 that kind of focus... tdd#: 1-800-345-2550 that's what i have when i trade. tdd#: 1-800-345-2550 tdd#: 1-800-345-2550 and the streetsmart edge trading platform from charles schwab... tdd#: 1-800-345-2550 ...helps me keep an eye on what's really important to me. tdd#: 1-800-345-2550 it's packed with tools that help me work my strategies, tdd#: 1-800-345-2550 spot patterns and find opportunities more easily.

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coming up on "power lunch," iphone, ipod and ipad, what about an i-watch, will it be a game changer? >> and the airline segment, we'll talk about that. and a chief investment strategist in private banking joins us. back to scottie. >> thanks so much. exchange funds has become a popular place in the market expanding into a 1$1.4 trillion industry. at the largest etf conference,

joined by one of the largest pieners of that boom. >> jack brennan is a big etf backer. he just addressed the conference. you said they were an innovation on money par with money funds. why is it so important? >> they're a better product, better way to get exposure and better way to implement strategies in a liquid low cost and transparent way. what's wrong with that? >> you love them but you said you had problems with some parts of the market, particularly what you call fringe products. what do you mean by fringe products? and be specific. >> a very small niche or they are strred they are highly levered and the problem is they tempt people to get involved with them even though they don't understand what the underlying strategy or financial structure is. i worry about products like that splattering mud on the core of the industry, which is such a powerful force. >> more regulation, should regulators step in and limit

access to these kinds of products? >> leverage products or etf and volatility products in. >> certainly there should be suitability requirements, right off the bat. i don't think they should prevent access but the market is the market and that the best regulator of all. >> before we let you go, actively manage etfs. that's big debate here. you said you had head-scratching doubts about whether we actively manage etfs. >> the adviser of the institution, you don't know how that manager will do and you want liquid low-cost exposure to what you're going to buy. >> thank you. >> thank you. >> i'll be here all day covering the big etf news. back to you. >> thanks very much. we look forward to your reports throughout the day. coming up on "halftime." we give you four plays so you can make your next move. i'm a conservative investor.

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welcome back. when you, the viewers, ask, we provide. let's start with a tweet i got for you, tom. here it is right now. housing rally too fast to be sustained in this longer term

economic development. what do you say. >> don't bet against the fed. where the fed goes, we go. >> so it doesn't matter that we've come this far in this environment. >> i don't think so. as long as they continue to print money, as long as interest rates are sustainable at about these levels. as long as they use that printed money to buy mortgage backed securities. as long as they buy mortgage backed securities from originating banks. as long as they are then selling these to investors who believe that mortgage guarantee is a real guarantee, housing will continue on. >> let me frame it also this way, the most tradeable, so to speak, housing markets right now are what? for people who are interested in the type of thing you're talking about. >> in terms of a company or in terms of a region? >> regions. >> regions have been the southwest. so california, nevada, arizona, texas. all three cities in texas have been the fastest growing housing markets in the nations for six months. austin, houston, dallas, atlanta, florida.

segments of the carolinas, primarily all of the southern states. >> okay. josh brown, how about macy's? what's your trade there? >> this is a really exciting set-up here. but i think you want to give it a tad bit of patience. $42 is a high that dates back to 2007, believe it or not, on a monthly chart. on a weekly chart, you can see it struggle three times. the end of february, i don't know which way the number will go. but i think a break out above 42 could put the stock up to 50 with no problems. there are no sellers above that level. >> okay, caterpillar, simon. >> leaning 2.2% yield. like it. >> you still bullish aig? >> i am. expectations are really high. wait for a dip. >> quickly. >> ung tough to trade because it is all seasonal, all weather, i'm out. >> final trades are up next. [ male announcer ] any technology not moving forward

is moving backward. [ engine turns over, tires squeal ] and you'll find advanced safety technology like an available heads-up display on the 2013 lexus gs. there's no going back. on the 2013 lexus gs. we asked total strangers to watch it for us. thank you so much. i appreciate it. i'll be right back. they didn't take a dime. how much in fees does your bank take to watch your money? if your bank takes more money than a stranger,

you need an ally. ally bank. your money needs an ally. a hairline fracture to the mandible and contusions to the metacarpus. what do you see? um, i see a duck. be more specific. i see the aflac duck. i see the aflac duck out of work and not making any money. i see him moving in with his parents and selling bootleg dvds out of the back of a van. dude, that's your life. remember, aflac will give him cash to help cover his rent, car payments and keep everything as normal as possible. i see lunch. [ monitor beeping ] let's move on. [ male announcer ] find out what a hospital stay could really cost you at aflac.com. more "likes." more tweets. so, beginning today, my son brock and his whole team will be our new senior social media strategists. any questions? since we make radiator valves wouldn't it be better if we just let fedex help us to expand to new markets? hmm gotta admit that's better than a few "likes."